[1] Nicaragua's relatively low population density and its wealth of land resources have both held the promise of solutions to poverty and been a major cause of it.
[2] The importance of one or two crops has meant that the country's entire economy has undergone boom-or-bust cycles determined primarily by worldwide prices for agricultural exports.
[2] From the end of World War II to the early 1960s, the growth and diversification of the agricultural sector drove the nation's economic expansion.
[2] From the early 1960s until the increased fighting in 1977 caused by the Sandinista revolution, agriculture remained a robust and significant part of the economy, although its growth slowed somewhat in comparison with the previous postwar decades.
[2] Historically, poor transportation limited production of sugarcane to roughly the same area in northwest Nicaragua where bananas were grown.
[4] Rice is primarily produced in the departments of Matagalpa, Granada, Boaco, Chontales, Leon, Rivas and Rio San Juan.
Unlike in other Central American countries, political squabbles over who would control the plantations and shipment of the crop prevented bananas from becoming the major export earner in Nicaragua.
[5] Because United States companies developed banana production in neighboring countries, Nicaragua's large potential for this crop remained underdeveloped.
[5] In addition, an outbreak of Panama disease, a fungus that kills the plant's underground stem, wiped out most of the banana plantations in the early 20th century.
[6] Coffee also grows only in the rich volcanic soil found on mountainous terrain, making transportation of the crop to the market difficult.
[6] Production is centered in the northern part of the central highlands north and east of Estelí, and also in the hilly volcanic region around Jinotepe.
[6] Nicaragua's poor transportation system and ecological concerns over the amount of land devoted to growing crops on volcanic slopes in the Pacific region limit further expansion of coffee cultivation.
[7] A latecomer to Nicaraguan agriculture, cotton became feasible as an export crop only in the 1950s, when pesticides were developed that permitted high yields in tropical climates.
[citation needed] In 1979 the new Sandinista administration quickly identified food as a national priority in order that the country's chronically malnourished rural population could be fed.
[9] For a variety of reasons, however, including the private sector's retention of 60 percent of arable land, the Sandinista government continued to import food and grow cash crops.
[9] To generate essential foreign exchange, the Ortega administration continued to support an upscale, high-tech agroexport sector, but returns on its investment diminished.